December 20, 2018 (MLN): The Board of Directors of Shahzad Textiles Mills Limited has decided to dispose of the obsolete machinery comprising of 18,552 spindles out of total 79,800 spindles, as these spindles are continuously running into losses.
A recent notification by the company to PSX informed that the BoD has approved disposal of machinery and to utilize the proceeds thereof for capital expenditure to install a stock manufacturing plant, subject to approval of the company’s members in Extraordinary General Meeting due to take place on 29 December, 2018.
“There are multiple factors which have led to the decision by the Directors of the company to dispose of the plant” the announcement said. “Due to poor economic/market conditions for the spinning sector, higher production cost, scheduled and unscheduled load shedding of electricity, the operation of textile mill which has become obsolete and hence inefficient cannot be run profitably” it added.
Speaking of the benefits arising out of this transaction, the notification said that better financial results are expected due to diversification and disposal of loss-making unit. This will result in better performance of the Company as a whole and will enhance the shareholders’ value.
